AP

Spain’s govt wants windfall tax on banks, energy companies

Jul 27, 2022, 5:20 PM | Updated: Jul 28, 2022, 5:54 am

MADRID (AP) — Spain’s Socialist-led coalition government wants large energy companies and banks to pay a windfall tax, which officials hope will yield around 7 billion euros (dollars) over two years.

The government delivered its proposal to parliament Thursday. A debate and vote by lawmakers were scheduled for after their summer recess.

Officials say the tax would apply to about 20 major corporations that would be prohibited from passing on the cost to customers. Under the government’s proposal, watchdog bodies would monitor the companies for compliance.

Britain and Italy have adopted similar windfall taxes. Energy companies have seen bumper profits as prices of oil and natural gas soared in the wake of Russia’s war in Ukraine.

The Spanish government said proceeds from its tax would help pay for measures to alleviate a cost of living crisis, including high energy bills.

The proposal calls for energy companies with more than 1 billion euros (dollars) in revenue in 2019 to pay an additional 1.2% in tax on revenue this year and next. The government hopes that will raise 4 billion euros (dollars).

Financial institutions are expected to provide 3 billion euros through a 4.8% tax on their net interest and customer fees.

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Spain’s govt wants windfall tax on banks, energy companies